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A Dollar for Your Thoughts: Feedback-Conditional Rebates on eBay

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  • Luis Cabral
  • Lingfang (Ivy) Li

Abstract

We run a series of controlled field experiments on eBay where buyers are re-warded for providing feedback. Our results provide little support for the hypothesis of buyer's rational economic behavior: the likelihood of feedback barely increases as we increase feedback rebate values; also, the speed of feedback, bid levels and the number of bids are all insensitive to rebate values. By contrast, we find evidence consistent with reciprocal buyer behavior. Lower trans-action quality leads to a higher probability of negative feedback as well as a speeding up of such negative feedback. However, when transaction quality is low (as measured by slow shipping), offering a rebate significantly decreases the likelihood of negative feedback. All in all, our results are consistent with the hypothesis that buyers reciprocate the seller's "good deeds" (feedback rebate, high transaction quality) with more frequent and more favorable feedback. As a result, sellers can "buy" feedback, but such feedback is likely to be biased.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Luis Cabral & Lingfang (Ivy) Li, 2012. "A Dollar for Your Thoughts: Feedback-Conditional Rebates on eBay," Working Papers 12-13, New York University, Leonard N. Stern School of Business, Department of Economics.
    • Handle: RePEc:ste:nystbu:12-13
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